Report: India May Not Ban Cryptocurrencies, But Treat Them as Commodities
July 12 2018 - 8:24AM
ADVFN Crypto NewsWire
India is not going to put a blanket
ban on digital currencies, but rather treat them as commodities, an
anonymous source in the government told news outlet Quartz July
11.
According to Quartz, a Finance Ministry panel has
ordered a study on cryptocurrencies, which may suggest that the
government would treat them as commodities. A senior government
official with knowledge of the panel’s discussion told Quartz that
they doubt the government aims to ban cryptocurrencies.
The source said that regulators’ main concern is how
to effectively regulate the trade and identify “where the money is
coming from.” They added that, “allowing it as a commodity may let
us better regulate trade and so that is being looked at.”
The official told Quartz that the committee is mostly
concerned about tracking investors and funds in order to fight
money laundering and illicit financing:
“Trade is not a criminal offence. Most of us trade in
various asset classes in the stock market. So how is this
[cryptocurrency trading] any different? What has to be in place is
a mechanism to be sure that the money used is not illegal money,
and to track its source is the most important thing.”
According to Quartz, former Reserve Bank of India (RBI) deputy
governor R Gandhi opined that treating cryptocurrencies as
commodities would clearly demonstrate to investors that crypto is
not real currency:
“If these are used to settle transactions, then it
acquires the nature of currency. So that is one thing that one
needs to be wary of. But if people want to invest in a commodity
then that is different, because then we can assume that they are
aware of the risks involved.”
In May, the RBI announced that it will no longer
provide services to any person or company that deals with
cryptocurrencies, though the bank stated it is planning to issue
its own cryptocurrency in the future. In January the Indian Finance
Ministry criticized Bitcoin (BTC) and other digital currencies for
their lack of intrinsic value. The Indian Finance Ministry said
there is “a real and heightened risk of investment bubble of the
type seen in Ponzi schemes, which can result in sudden and
prolonged crash exposing investors.”
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